Some people use charts like these, where funds tend to flow in during peaks and flow out during troughs, to suggest that retail investors are dumb. However, I believe it is not what it seems. As George Soros has suggested under his reflexivity theory, which I support to a large degree, prices may influence investors but investors may also influence prices. The "dumb money" looks dumb because they themselves cause the outcome. In other words, fund flows will almost always be high at peaks and low at troughs.